单选题 Use the following information to determine the value of River Gardens' common stock:
Expected dividend payout ratio is 45 percent.
Expected dividend growth rate is 6.5 percent.
River Gardens' required return is 12.4 percent.
Expected earnings per share next year are $3.25.
A. $27.25. B. $24.80. C. $19.67.

【正确答案】 B

【答案解析】First, estimate the price to earnings (P/E) ratio as: (0.45)/(0.124-0.065)=7.63. Then, multiply the expected earnings by the estimated P/E ratio: $3.25×7.63=$24.80.